Abstract: Nowadays, study of formation of shear bands in soil has become an important research field in soil mechanics. A surface crust was formed with yellowish dark brown silty clay in Shanghai. The stratum is a load bearing stratum for shallow foundations in Shanghai. Experimental investigations of strain localization and formation of shear bands will conduce to a thorough study of basic behavior of this stratum clay. This paper introduces the plane strain compression apparatus which has been modified and improved. Through the study and analysis on the result of the consolidated undrained plane strain compression tests on yellowish dark brown silty clay of shallow stratum in Shanghai, some laws of formation of shear bands are presented quantitatively. Study of tests for measuring lateral strain localization of undisturbed clay in the condition of plane strain compression was rarely reported at home and abroad.